Amendment of prescribed interest rate

If parties to a transaction have not agreed on a rate of interest, expressly or implied, and the rate is not governed by any other law, the rate of interest is determined as prescribed in terms of the Prescribed Rate of Interest Act No. 55 of 1975. Recently an amendment was made to the rate applicable in the above instance due to the prescribed rate not being market related. What is the position now?

A large majority of residential lease agreements contain a clause affording a landlord the right to summarily cancel the lease agreement, without further notice to the tenant, should the tenant fail to pay rental when it is due. This is, however, not allowed where the CPA and PIE Act are applicable, and in the below paragraphs we briefly explain what the correct procedure is.

In practice, one receives many questions from trustees regarding the practicalities of managing trusts. What must be done if a trustee dies or resigns? What is required to record decision-making, if anything? Sound trust administration demands diligence and concern with legalities. Below we address a few of the most frequent questions we encounter and the answers thereto.

NHBRC is the acronym for the National Home Builders Registration Council created in terms of the Housing Consumers Protection Measures Act (‘The Act’). The Act obliges home builders to register with the Council as part of a regulatory system aimed at protecting consumers from poor building work. Homes to be erected must also be enrolled with the Council. How can you ensure you are protected and that your builder complies?

The maxim ‘huur gaat voor koop’ is generally familiar to all property law practitioners, and probably equally well-known amongst landlords and tenants alike. The exact content of the protection afforded by this rule of our law can, however, still leave a tenant (or other party relying on the maxim) on his back foot because the exact content of this rule is not always correctly understood. Translated loosely, it means that a lease trumps a later sale.

The persistently challenging economic climate has led to a number of insolvencies, both that of high profile and man-in-the-street property owners, developers and occupiers. In property sale transactions, this is especially challenging where the seller is declared insolvent after the agreement was entered into but before transfer, the more so where the purchaser has paid part of the purchase price. This is because at common law, where a seller is declared insolvent after the sale of a property, but before transfer thereof, the property vests in the liquidator of the insolvent estate and the purchaser becomes a concurrent creditor of the insolvent estate.

The recent judgment in Relebipi Properties CC v De Wet N.O. and Others (36209/2012) [2014] ZAGPPHC 87 (17 January 2014) explains how the rules of insolvency law works in such a scenario.

NATIONAL CREDIT ACT – RECENT AMENDMENTS ARE ABOUT MUCH MORE THAN JUST A CREDIT INFORMATION AMNESTY

Apart from the much commented regulations setting out the details of the credit information amnesty passed at the end of March this year, other amendments to the National Credit Act 34 of 2005 (‘the current Act’) were assented to on the 16th of May 2014. These are equally important to the credit arena and we highlight the additional changes here.

The latest amendments to the National Credit Act have caused great confusion, with some consumers believing that the introduction of what has been termed a “credit amnesty” means they do not have to repay existing debts. Credit providers, on the other hand, are becoming increasingly concerned that they will have less information to assess their risks in providing credit.

This month the Constitutional Court overturned a Supreme Court of Appeal judgment that related to whether a (high end) security company can be held liable for damages suffered by the home owner after robbers, dressed as policemen, gained access to his house and stole many valuables. In South Africa where many businesses and private individuals employ forms of security in an endeavor to safeguard against robbery and assault, the outcome is valuable, very relevant and shows an appreciation on the side of the highest Court of the reasonable expectations that clients of such companies may hold.

People often do not read documents to which they append their signatures! If, for example, you apply to the bank for a credit card, or for financing of a vehicle your business is acquiring, you assume a basic understanding of the gist of the documents being handed to you for signature, and sign it on the assumption that it would contain ‘standard’ provisions. Whether or not certain provisions in some types of agreements are ‘standard’ and expected, it is undoubtedly risky to sign any legal document without ascertaining the implications thereof. More so when you bind yourself as surety for someone else’s debts. Find out why.

FINALLY – CLARIFICATION FOR LENDERS ON REQUIRED STEPS TO ACT AGAINST DEFAULTERS

Recent case law has all but clarified what steps lenders must follow in order to validly commence legal proceedings against defaulting borrowers. It is so that the National Credit Act 34 of 2005 (‘the NCA’) requires a lender to send a ‘section 129 Notice’ to a consumer before enforcement steps may be initiated, but must this letter actually reach the debtor? In other words, does the Act require the lender to ensure that the debtor received the notice personally? Or is it adequate compliance with the NCA’s consumer protection aims, if the notice was sent to the debtor at the address indicated in the loan agreement per registered post? What if the debtor never collects the notice from the Post Office?

With the coming into operation of the National Credit Act, many lenders felt that (too) much leniency is afforded to borrowers when they default on their repayments. The good and necessary aims of the Act aside, there are instances where borrowers appear to abuse the relief options afforded by the Act. There is, however, always a point of no return, where the money must be repaid or the asset is lost.

DEFAULTING DEBTOR CAN TAKE THE STING OUT OF AN EXISTING DEFAULT JUDGMENT BY REINSTATING A CREDIT AGREEMENT

The NCA has a mechanism whereby a defaulting debtor can, in certain circumstances and by operation of law, reinstate a credit agreement by paying the full outstanding amount and whatever related enforcement costs which may exist at the time. The effect hereof is to render an existing default judgment useless in the hands of the judgment creditor, obliging him to obtain a new judgment should the creditor again default.

The fact that the National Council of Societies for the Prevention of Cruelty to Animals (‘the NSPCA’) is a juristic person has become an obstacle in its proper functioning. This is because, in terms of the Criminal Procedure Act, only private persons (as opposed to entities/‘juristic persons’) may pursue private prosecutions in any case where the police or other enforcement agency (via the office of the Director of Public Prosecutions) declines to prosecute an alleged offence. In other words, only private people can become private prosecutors and the NSPCA cannot do so itself.

Adjudication is a very specific method of dispute resolution and, judging from the issues raised in the recent judgment in Steffanutti Stocks (Pty) Ltd v S8 Property (Pty) Ltd (October 2013), is a mechanism that parties to JBCC contracts need to understand – whether to save unnecessary litigation costs or to enable informed partaking in the adjudication process.

For the purposes of concluding contracts electronically and the growth of e-commerce, the Electronic Communications and Transactions Act 25 of 2002 (‘ECTA’) that came into force on 30 August 2002, is of major significance. ECTA makes provision for the recognition and regulation of electronic commerce and its provisions deal specifically with how, when and where an agreement concluded electronically, comes into existence. In so doing, ECTA made electronic signatures legal in 2002.

Road traffic accidents are generally thought of as incidents that happen to people other than ourselves. However, statistics show that this is not the case in South Africa. Even if you are a safe driver, statistics have reflected that reckless and negligent driving are common place in South Africa and you could be the innocent victim of such driving.

Parliament recently passed the 17th Constitutional Amendment Act by more than the required two-thirds majority. The new law entrenches the Constitutional Court as the highest Court in the land, while ensuring that the Supreme Court of Appeal’s role is not reduced to a shadow of what it used to be. Let’s have a look at the changes.

Recent amendments to the Transfer Duty Act grant a transfer duty exemption when shareblock holding is converted to sectional title ownership. This financial benefit re-opens many shareblock holders’ deliberations as to whether conversion is the route to go. A brief comparison between the rights conferred in each instance will help one to come to a decision.